The economy of the European Union is almost certainly entering a phase of recession. The majority of experts contacted by the Reuters agency are convinced of this. Germany will probably not avoid an economic downturn either.
The economy of the European Union in recession
Rising living costs, among other things, due to rising energy prices or rising interest rates. These are the main reasons why the economy of the European Union is heading into recession. “The arrival of the recession is also indicated by the development of the Purchasing Managers’ Index (PMI). The recession also affects Europe’s largest economy, Germany,” Peter Schaffrik, an analyst at the Royal Bank of Canada, told Reuters.
Skyrocketing energy prices
The news about Germany’s recession comes as a surprise, especially after the federal government approved a 65 billion euro package to support households and businesses facing skyrocketing energy prices. “The package will do little to change the fact that Germany is very likely to slip into recession in the fall,” Commerzbank Chief Economist Jörg Krämer told Reuters.
Experts emphasize above all the fact that Germany has become a net importer after many decades, mainly due to rising natural gas prices. According to them, this is also a signal that the German economy is not doing well.